Back in 2000 when I was investing quite heavily there was no concept of BMV or buying at a discount from market value. There were gifted deposits but you still had to put capital in to buy.
Now when I was buying it was a rising market. So if I needed deposits to put down I would speak to mortgage broker, put in some remortgage applications and get a whole load of cash to put down. I often put £8k+ in to a deal to get the property which I am glad I did as they are worth a lot more than I paid for them.
Fast forward to now. We have the situation where you can structure deals where you can put a lot less than £8k in and earn a nice monthly income.
Now if you were to compare the return on capital based on the old way of investing and the new way of investing you would get the following comparison:
Now remember I have not factored in capital growth. If you were to include this the figures would be a lot higher. But just looking on cash returns the new way looks a lot better.
The figure of 24% is a like for like comparison with savings rates. Considering banks offer you a max of 6% (usually less than 1% though) then a 24% return looks very attractive. Of course there is risk attached to investing in property but there is also a risk of keeping your money in the bank!
Now this should get you really excited. Take the example of the new way investing where you need £5,000 to invest. Lets say you could borrow this £5,000 at 9.9%?
Then you could have what would seem absurd where you could make money out of nothing. This is because your capital invested is zero as you have borrowed it. Welcome to becoming very rich. If you employ this strategy then you can become as rich as your credit line.
This is pretty much what I do. Borrow heavily (to the tune of £7.5m) utilising every bit of finance out there so I put only borrowed money in to get money out the other end.
So do I have deals offering 24% returns or better? You bet! Have a look at my treasure chest of deals my office have been busy mining.
So do I have a lender who is willing to lend you the the money to put in to the deal? You bet! Have a look at my preferred unsecured lender. They lend up to £25k, decision in 3 hours and no arrangement fees. If you have no joy with them then you can contact my broker and she has access to some more lenders.
When you invest like this then your returns become infinite. This is basic mathematics. If you divide any number by zero it equals infinity. So if you divide the returns you make by zero (the amount personally invested) then your return is infinity.
2009 will be the year of infinite returns for some. If you want help in acquiring any of the deals then request a callback.
Posted on: 28th Jan 2009